Competition and Productivity
There's a belief that competition drives innovation. Monopolies stagnate when they're allowed total control over entire industries. Invisible forces maintain control over competitors to ensure the right balance of efficiency and production.
Ergo, Microsoft needs Apple, Google needs Yahoo, Walmart needs Target, and Verizon needs AT&T. But having said all that... these companies are in competition with one another for dominance and control of their respective marketplace. They each individually want to control the market and set prices at whatever they want. As a result, you see them use every opportunity to get advantages over each other. From advertising to prices to cross-promotions with other favored industries... there's always some way to gain an advantage. And that's to the benefit of everybody.
However, another way to gain a competitive advantage is to "trim the fat". Oftentimes, this resolves to identifying the least productive areas of the business and figuring out how to integrate their functionality into other areas (this is called "synergy") or creating better methods of accomplishing the same things (called "innovation"). With synergy and innovation, companies are able to produce the same quality of goods and services for less cost and with less manpower. This is generally good, until you consider the last bit about "less manpower".
Industries keep around their labor force to maintain expert knowledge during the transition from the old systems to the more efficient new systems. As the expert knowledge is utilized to iron-out bugs with the new synergies and innovations, the expert knowledge becomes common knowledge. After that, less emphasis is put on maintaining the personnel who had the expert knowledge. In addition, other pressures are applied for the business to build profits. The natural response to that is... job cuts! So the people who aren't needed anymore because their roles have been replaced are let go.
Then you have unemployment... which is where the country is currently at. 6.5% of the current workforce is unemployed. That's how new industries are created. Either the emerging energy industry will find a place for those people or something new will come along. If not... something cataclysmic will happen. And that is... the government will step in and find work for the unemployed. At the end of the day, the final competitive balance that Google, Microsoft, Walmart, and AT&T have to face is Washington. If those companies lay off too many of their employees... Uncle Sam will pick up the slack. That's the PRIMARY FUNCTION of government... security for its population.
Ergo, if companies don't want to answer to a stronger central government, they need to stop laying off their workforce or else the government will step in and start "hiring" all these people in some capacity or another.
This is why it is particularly unnerving that The Federal Reserve has not stepped in to bailout General Motors. It's as if the government has a different plan for Detroit (maybe they want to implement the GTC!). Either way, there's a waiting game to see if GM can pull themselves out of the muck or if the government enact some radically new legislation that'll make large scale automotive manufacturing obsolete.
What is also particularly unnerving is the Exxon has sat on their hands through the entire Gas/Energy crisis. It's as if they don't care. How dare they have record profits while other industries suffer. Fuck them. With their billions in profits, they ought to rebuild Detroit and New Orleans! At the very least, they *ought* to make headlines with whatever their efforts have been to replace the fossil fuels that have been the lifeblood of their company for so long. Investment in solar technology? Investment in wind power? No, as far as we know the executives at Exxon are swimming in their profits like Scrooge McDuck used to swim in his vault. And as a result... by sitting on their profits I predict a rude awakening for Exxon during the upcoming administration.
And that's the invisible hand of the market. Corporations versus governments. And in the end... everybody wins.
Ergo, Microsoft needs Apple, Google needs Yahoo, Walmart needs Target, and Verizon needs AT&T. But having said all that... these companies are in competition with one another for dominance and control of their respective marketplace. They each individually want to control the market and set prices at whatever they want. As a result, you see them use every opportunity to get advantages over each other. From advertising to prices to cross-promotions with other favored industries... there's always some way to gain an advantage. And that's to the benefit of everybody.
However, another way to gain a competitive advantage is to "trim the fat". Oftentimes, this resolves to identifying the least productive areas of the business and figuring out how to integrate their functionality into other areas (this is called "synergy") or creating better methods of accomplishing the same things (called "innovation"). With synergy and innovation, companies are able to produce the same quality of goods and services for less cost and with less manpower. This is generally good, until you consider the last bit about "less manpower".
Industries keep around their labor force to maintain expert knowledge during the transition from the old systems to the more efficient new systems. As the expert knowledge is utilized to iron-out bugs with the new synergies and innovations, the expert knowledge becomes common knowledge. After that, less emphasis is put on maintaining the personnel who had the expert knowledge. In addition, other pressures are applied for the business to build profits. The natural response to that is... job cuts! So the people who aren't needed anymore because their roles have been replaced are let go.
Then you have unemployment... which is where the country is currently at. 6.5% of the current workforce is unemployed. That's how new industries are created. Either the emerging energy industry will find a place for those people or something new will come along. If not... something cataclysmic will happen. And that is... the government will step in and find work for the unemployed. At the end of the day, the final competitive balance that Google, Microsoft, Walmart, and AT&T have to face is Washington. If those companies lay off too many of their employees... Uncle Sam will pick up the slack. That's the PRIMARY FUNCTION of government... security for its population.
Ergo, if companies don't want to answer to a stronger central government, they need to stop laying off their workforce or else the government will step in and start "hiring" all these people in some capacity or another.
This is why it is particularly unnerving that The Federal Reserve has not stepped in to bailout General Motors. It's as if the government has a different plan for Detroit (maybe they want to implement the GTC!). Either way, there's a waiting game to see if GM can pull themselves out of the muck or if the government enact some radically new legislation that'll make large scale automotive manufacturing obsolete.
What is also particularly unnerving is the Exxon has sat on their hands through the entire Gas/Energy crisis. It's as if they don't care. How dare they have record profits while other industries suffer. Fuck them. With their billions in profits, they ought to rebuild Detroit and New Orleans! At the very least, they *ought* to make headlines with whatever their efforts have been to replace the fossil fuels that have been the lifeblood of their company for so long. Investment in solar technology? Investment in wind power? No, as far as we know the executives at Exxon are swimming in their profits like Scrooge McDuck used to swim in his vault. And as a result... by sitting on their profits I predict a rude awakening for Exxon during the upcoming administration.
And that's the invisible hand of the market. Corporations versus governments. And in the end... everybody wins.
posted by Rob | 8:27 AM
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